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3 Society and Our Customers TOYOTA Toyota MembersBusiness Partners Ourselves TBP Provides Growth & Satisfaction The satisfaction of having the best products and services available The satisfaction of steady company growth and prosperity Combining our efforts and attaining mutual growth Mutual trust through successful business Personal growth and accomplishment Outcome of TBP

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7 2. Toyota Way 2001 Respect for People Respect Respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust. Teamwork Stimulate personal and professional growth, share the opportunities of development and maximize individual and team performance. Challenge Form a long term vision, meeting challenges with courage and creativity to realize our dreams. Kaizen We improve our business operations continuously, always driving for innovation and evolution. Genchi Genbutsu Practice Genchi Genbutsu......go to the source to find the facts to make correct decisions, build consensus and achieve goals at our best speed. Continuous Improvement

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10 4. Definition of Problem in Toyota What does “Problem” mean to you?

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11 golden eggs Problems are golden eggs for KAIZEN “Problem” is not a negative word. Problems are disguised KAIZEN. We need to aggressively uncover them. At Toyota… 4. Definition of Problem in Toyota “No one has more trouble than the person who claims to have no trouble.” (Having no problems is the biggest problem of all.) Taiichi Ohno “No one has more trouble than the person who claims to have no trouble.” (Having no problems is the biggest problem of all.) Taiichi Ohno

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15 Activity For the TBP Step you are assigned, list; –Important points to remember when applying this step –Common mistakes people make when applying this step –One piece of advice you would give to others to apply this step well You have 15 minutes

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16 Step 1: Clarify the Problem 8 STEPS PROCESSES Step 2. Break Down the Problem Step 1. Clarify the Problem 1. Make a commitment 2. Set measurable, concrete, and challenging targets 1. Clarify the Ultimate Goal of your responsibilities & work 2. Clarify the Ideal Situation and Current Situation of your work 3. Visualize the gap between the Current Situation and the Ideal Situation 1. Break down the problem 2. Prioritize the broken down problems 3. Specify the Point of Occurrence by checking the process through GENCHI GENBUTSU 1. Examine the Point of Occurrence and think of possible causes without any prejudice 2. Gather facts through GENCHI GENBUTSU and keep asking “Why?” 3. Specify the root cause Step 3. Target Setting Step 4. Root Cause Analysis 1. Develop as many potential countermeasures as possible 2. Select the highest value-added countermeasures 3. Build consensus with others 4. Create a clear and concrete action-plan Step 5. Develop Countermeasures

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18 Step 1: Clarify the Problem Department ⇒ To produce the best products and services at fair prices 【 Research & Development 】 【 Engineering 】【 Procurement 】【 Production 】【 Sales 】 【 Finance 】 To improve customers lives through Toyota automobiles My Job’s Purpose To build the best automobiles To sell lots of automobiles To correctly settle all accounts To build the most efficient production lines To acquire the best parts at the best prices To produce without mura, muri & muda* Draft Blueprints Design Production Lines Select Parts to Purchase Design Production Plans Create Sales & Marketing Campaigns Issue and Collect Payments My Work & Responsibilities Toyota’s Goal: To provide the satisfaction from our products and services to societies and our customers The “Ultimate Goal” of your work should be connected to Toyota’s Ultimate Goal. The Goals That Guide My Job’s Purpose To provide customers with highly functional and high-quality cars at reasonable prices Step 1 (1): Clarify the “Ultimate Goal” of your responsibilities & work

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19 Step 1: Clarify the Problem Julie is supervising the assembly line which equips auto parts to the car models A, B & C. Her assignment is to supervise and to make sure the quality of both interior and exterior of the cars before proceeding to the next assembly line. She recently realized that the (exterior) scratches on the cars have increased to around 3% (average 18 cars per day) over the past 3 days. [For the past 6 months the line has had 0 defects] Example 1. Julie Case

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20 【 Ultimate Goal 】 【 Ideal Situation 】 【 Current Situation 】 【 Problem 】 The exterior scratches on the vehicles should be 0 Step 1: Clarify the Problem Example 1. Julie Case To provide customers with high quality vehicles in a timely manner at a low cost The exterior scratches on the vehicles averaged 18/600 per day over 3 days Increase in exterior scratches found on vehicles (Av. 18 per day)

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21 Step 2: Break Down the Problem 8 STEPS PROCESSES Step 2. Break Down the Problem Step 1. Clarify the Problem 1. Make a commitment 2. Set measurable, concrete, and challenging targets 1. Clarify the Ultimate Goal of your responsibilities & work 2. Clarify the Ideal Situation and Current Situation of your work 3. Visualize the gap between the Current Situation and the Ideal Situation 1. Break down the problem 2. Prioritize the broken down problems 3. Specify the Point of Occurrence by checking the process through GENCHI GENBUTSU 1. Examine the Point of Occurrence and think of possible causes without any prejudice 2. Gather facts through GENCHI GENBUTSU and keep asking “Why?” 3. Specify the root cause Step 3. Target Setting Step 4. Root Cause Analysis 1. Develop as many potential countermeasures as possible 2. Select the highest value-added countermeasures 3. Build consensus with others 4. Create a clear and concrete action-plan Step 5. Develop Countermeasures

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22 Step 2: Break Down the Problem ～ Break down the problem and clarify the Point of Occurrence based on facts ～ Large / Vague Problem Problem what? where? when? who? Point of Occurrence Break down Prioritize See the Process (GENCHI GENBUTSU) Prioritized Problem the problem Problem

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27 Step 2 (2). Select the Prioritized Problem Priority Items Level of Importance Level of Urgency Potential for Expansion Is this enough to proceed to the next step???? Problem How to select the prioritized problem from this point? No! Step 2: Break Down the Problem

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29 Step 2: Break Down the Problem Point of Occurrence Step 2. (3) Specify the point of occurrence by checking the process through GENCHI GENBUTSU Where does the problem occur? Check the process through GENCHI GENBUTSU

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30 Go & see the process. Which process? Where? Point of Occurrence Assembly (Job) Flow Julie found the scratches at Section 3 with Genchi Genbutsu Example 1. Julie Case Step 2: Break Down the Problem Problem PerceptionPoint of Occurrence scratches discovered scratches present Trace back No scratches Trace back scratches present Trace back scratches present Trace back No scratches

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31 6 (33%) of the (exterior) long scratches found on the bottom part of the front left door, were made during the afternoon shift in Section 3 on the assembly line Example 1. Julie Case Prioritized Problem at the Point of Occurrence: Step 2: Break Down the Problem

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32 Step 3: Target Setting 8 STEPS PROCESSES Step 2. Break Down the Problem Step 1. Clarify the Problem 1. Make a commitment 2. Set measurable, concrete, and challenging targets 1. Clarify the Ultimate Goal of your responsibilities & work 2. Clarify the Ideal Situation and Current Situation of your work 3. Visualize the gap between the Current Situation and the Ideal Situation 1. Break down the problem 2. Prioritize the broken down problems 3. Specify the Point of Occurrence by checking the process through GENCHI GENBUTSU 1. Examine the Point of Occurrence and think of possible causes without any prejudice 2. Gather facts through GENCHI GENBUTSU and keep asking “Why?” 3. Specify the root cause Step 3. Target Setting Step 4. Root Cause Analysis 1. Develop as many potential countermeasures as possible 2. Select the highest value-added countermeasures 3. Build consensus with others 4. Create a clear and concrete action-plan Step 5. Develop Countermeasures

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33 Step 3: Target Setting ～ With enthusiasm and commitment set challenging target. The target should be measurable ～ Target Prioritized Problem at the Point of Occurrence Target should be quantitative, concrete and challenging How Much? By When? Targets should not be what to do

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34 Step 3 (2). Set measurable, concrete, and challenging targets ■ Sufficient & efficient breakdown will let us set targets that are measurable ■ Write targets in an “output” form including “by when” and “how much” ⇒ concrete targets ■ Challenging targets let us grow in the long-term Set the target which will eliminate the problem at the point of occurrence Step 3: Target Setting

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35 By the end of this month, eliminate all exterior long scratches on the bottom part of the left doors of the vehicles produced in the afternoon in the Section 3 6 (33%) of the (exterior) long scratches found on the bottom part of the front left door, were made during the afternoon shift in Section 3 on the assembly line Step 3: Target Setting Example 1. Julie Case

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36 Step 4: Root Cause Analysis 8 STEPS PROCESSES Step 2. Break Down the Problem Step 1. Clarify the Problem 1. Make a commitment 2. Set measurable, concrete, and challenging targets 1. Clarify the Ultimate Goal of your responsibilities & work 2. Clarify the Ideal Situation and Current Situation of your work 3. Visualize the gap between the Current Situation and the Ideal Situation 1. Break down the problem 2. Prioritize the broken down problems 3. Specify the Point of Occurrence by checking the process through GENCHI GENBUTSU 1. Examine the Point of Occurrence and think of possible causes without any prejudice 2. Gather facts through GENCHI GENBUTSU and keep asking “Why?” 3. Specify the root cause Step 3. Target Setting Step 4. Root Cause Analysis 1. Develop as many potential countermeasures as possible 2. Select the highest value-added countermeasures 3. Build consensus with others 4. Create a clear and concrete action-plan Step 5. Develop Countermeasures

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37 Step 4: Root Cause Analysis Confirm facts, and if there’s no cause-and- result sequence in the cause, stop asking “WHY?”. ～ In order to find the root cause, thoroughly investigate the Prioritized Problem at the Point of Occurrence ～ Prioritized Problem at the Point of Occurrence Possible cause Check whether it is a fact or not Think the possible cause Not a fact Fact Repeat Possible cause Not a fact Fact Possible cause Not a factFact Root cause Countermeasure

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38 Step 4: Root Cause Analysis Checklist: □ Look at the causes horizontally on the tree Check for thoroughness and non-redundancy. □ Do not allow root causes to be easily defined by a human factor ie: attitude and motivation. □ Look at the causes vertically and check for causal relationships Ask: X happens because of Y Y happens because of Z, etc… Prioritized Problem at the Point of Occurrence Possible cause Not a fact Fact Possible cause Not a fact Fact Possible cause Not a factFact Root cause

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39 Welding Robot stops in the middle of its operation Why did the robot stop? A fuse in the robot has blown Why is the fuse blown? Circuit overloaded Why is the circuit overloaded? The bearings have damaged one another and locked up Step 4: Root Cause Analysis EX2. Mr. Ohno’s Robot Case

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40 Why is the intake clogged with metal shavings? There was insufficient lubrication on the bearings Why was there insufficient lubrication on the bearings? Oil pump on robot is not circulating sufficient oil Why is the pump not circulating sufficient oil? Pump intake is clogged with metal shavings No filter on pump intake (as designed) (Root Cause) Why have the bearings damaged one another? Step 4: Root Cause Analysis EX2. Mr. Ohno’s Robot Case

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41 Step 4: Root Cause Analysis StaffMachine Environment Facilities are not appropriate Work instructions are poor 6 (33%) of the (exterior) long scratches found on the bottom part of the front left door, were made during the afternoon shift in Section 3 on the assembly line Staff’s work methods are not appropriate Staff’s abilities are poor Work clothes are inappropriate = TM’s (John’s) belt buckle scratched vehicles! GENCHI GENBUTSU Example 1. Julie Case: Start with “WHY”

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42 Step 5: Develop Countermeasures 8 STEPS PROCESSES Step 2. Break Down the Problem Step 1. Clarify the Problem 1. Make a commitment 2. Set measurable, concrete, and challenging targets 1. Clarify the Ultimate Goal of your responsibilities & work 2. Clarify the Ideal Situation and Current Situation of your work 3. Visualize the gap between the Current Situation and the Ideal Situation 1. Break down the problem 2. Prioritize the broken down problems 3. Specify the Point of Occurrence by checking the process through GENCHI GENBUTSU 1. Examine the Point of Occurrence and think of possible causes without any prejudice 2. Gather facts through GENCHI GENBUTSU and keep asking “Why?” 3. Specify the root cause Step 3. Target Setting Step 4. Root Cause Analysis 1. Develop as many potential countermeasures as possible 2. Select the highest value-added countermeasures 3. Build consensus with others 4. Create a clear and concrete action-plan Step 5. Develop Countermeasures

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44 Temporary Measure vs. Countermeasure Temporary Measure –To solve an existing undesirable situation, or bring a situation back to its original state for a set period of time –Can not fix the root cause –May not last for long, the problem may arise again Countermeasure –Will eliminate the root cause and, –Solve the prioritised problem at the point of occurrence –Prevent the problem from reoccurrence

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45 Proposal What people or parties are involved? Proposal Root Cause Countermeasure Proposal Can We Get Rid of it? What are the risks involved? Framework of Preconceived Ideas Framework of own Responsibilities ～ Broadly considering all stakeholders and risks involved, develop countermeasures with the highest added-value ～ Step 5: Develop Countermeasures

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46 Target Contents DistributionEffectivenessBudgetRisk Overall Assessment Category How to Summarize Dept. Manager Total # of vehicles + Key model types Graph+ Charts Paper ○ - Guaranteed to be seen - Can be carried anytime ○ No problem if the target is only directors △ How to distribute when not available in the office ○ Internet △ -Doesn’t check internet -Overburdened with materials already ◎ No budget required △ How to distribute when not in the office × Establish priorities with respect to: ■ Benefits ■ Manpower / Cost ■ Risks (2). Narrow down the countermeasures to the most practical and effective Step 5: Develop Countermeasures

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47 Step 6: See Countermeasures Through 8 STEPS PROCESSES 1.With united efforts, implement countermeasures with speed and persistence 2.Share information with others by informing, reporting and consulting 3.Never give up in seeking to eliminate the root cause 1.Evaluate the results and the processes and share it with members involved 2.Evaluate from three key perspectives: Customer’s, Toyota’s, and Your Own 3. Understand the reasons of success and failure 1. Set successful processes as new standards 2. Share the new standard (YOKOTEN) 3. Start the next round of KAIZEN Step 8. Standardize Successful Processes Step 7. Evaluate Both Results and Processes Step 6. See Countermeasures Through

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48 Step 6: See Countermeasures Through ～ Speedy action together as a team Never give up and act persistently ～ Proper Checking Never give up and act persistently Timely Reporting, Informing, Consulting Speedy action Together as a team

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49 8 STEPS PROCESSES 1.With united efforts, implement countermeasures with speed and persistence 2.Share information with others by informing, reporting and consulting 3.Never give up in seeking to eliminate the root cause 1.Evaluate the results and the processes and share it with members involved 2.Evaluate from three key perspectives: Customer’s, Toyota’s, and Your Own 3. Understand the reasons of success and failure 1. Set successful processes as new standards 2. Share the new standard (YOKOTEN) 3. Start the next round of KAIZEN Step 8. Standardize Successful Processes Step 7. Evaluate Both Results and Processes Step 6. See Countermeasures Through Step 7: Evaluate Both Results & Processes

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50 In terms of the goal, how was the outcome? Assessment (1)Evaluate the overall results, and the processes used, then share the evaluation with involved members (2)Evaluate from the three key viewpoints: Customer’s, Toyota’s, and Your Own (3)Understand the factors behind the success or failure From the Customer’s Viewpoint From Toyota the Company’s Viewpoint From Your Own Personal Viewpoint What was the result? What was the process? - Evaluate both results and processes and learn from both success and failure - Step 7: Evaluate Both Results & Processes

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54 Step 8: Standardize Successful Processes 8 STEPS PROCESSES 1.With united efforts, implement countermeasures with speed and persistence 2.Share information with others by informing, reporting and consulting 3.Never give up in seeking to eliminate the root cause 1.Evaluate the results and the processes and share it with members involved 2.Evaluate from three key perspectives: Customer’s, Toyota’s, and Your Own 3. Understand the reasons of success and failure 1. Set successful processes as new standards 2. Share the new standard (YOKOTEN) 3. Start the next round of KAIZEN Step 8. Standardize Successful Processes Step 7. Evaluate Both Results and Processes Step 6. See Countermeasures Through

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56 FormsManualChecklistsFlow-chart If possible, the precedent’s overall structure should clarify all relevant factors so that anyone, at anytime, without muda, mura, or muri can implement the precedent. Step 8: Standardize Successful Processes

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57 Your work is a repeating cycle of Problem solving. Start the next round of KAIZEN when you have solved one problem. Step 8: Standardize Successful Processes